Irish PM demands review of watchdog over flawed Anglo Irish case

DUBLIN (Reuters) - Ireland's prime minister Enda Kenny called for a review on Wednesday into failings by the country's corporate watchdog in a criminal investigation into the former head of the failed Anglo Irish Bank. Sean FitzPatrick was acquitted this week of charges of misleading auditors about tens of millions of euros in personal loans after a judge ruled that the investigation which led to the trial fell short of the impartial, unbiased inquiry to which a defendant is entitled. FitzPatrick had pleaded not guilty to the charges, which followed the jailing last year of two former Anglo bosses who were among the first senior bank executives to be jailed in relation to Ireland's banking crisis a decade ago. The judge in FitzPatrick's trial criticised staff at Ireland's Office of the Director of Corporate Enforcement (ODCE), in particular their coaching of two witnesses - audit partners from Ernst & Young (EY) - that had contaminated their evidence. Anglo Irish, which was nationalised in 2009 and subsequently liquidated, was synonymous with the lending bonanza that drove Ireland into an international bailout in 2010. Ireland's banking crisis cost the country's taxpayers 64 billion euros ($72 billion), the euro zone's most expensive state bailout at almost 40 percent of annual economic output. "I want the minister to carry out an absolute review of what happened here. The minister has asked the Director of the ODCE for a full report, including the role of all professionals involved in this case," Kenny told lawmakers. The ODCE said it fully accepted the judge's criticism and that at the time, it was not equipped to undertake a probe of the scale involved. It said it had since undergone substantial organisational changes, including the recruitment of several investigative accountants and forensics specialists. Some opposition parties called for the ODCE to be replaced and Kenny said "nothing is ruled out." Leo Varadkar, the overwhelming favourite to succeed Kenny when he steps down as Fine Gael party leader and prime minister next month, said he was not satisfied that Ireland's response to white collar crime and corporate fraud was robust enough. Varadkar said he would make any changes that are needed. ($1 = 0.8937 euros) (Reporting by Padraic Halpin; editing by Alexander Smith)